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CBK joins more than 38 other Central Banks from around the world in reducing the lending rate in a bid to stimulate slowing growth caused by the coronavirus pandemic/FILE

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Repayment period of personal loans extended by one year as borrowers feel the heat of coronavirus

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March 2 extended by up to one year.

Central Bank of Kenya governor Patrick Njoroge said the move would alleviate the adverse economic effects borrowers may face due to the ongoing coronavirus pandemic.

“People had borrowed personal loans; some may lose their jobs because of this pandemic, so they may not have the money to service these loans,” Njoroge said, urging borrowers to contact their banks to get the extension.

In a bid to save the private sector, Njoroge has also ordered for the assessment and restructuring of loans being serviced by medium-sized businesses and corporate borrowers.

The banks, Njoroge said, will meet all the costs related to the extension and restructuring of loans.

“While the extent of the adverse effects is still evolving, it is already evident that the impact on some of the customers may be severe.”

A report by Cytonn Investments reveals that most businesses expect to be disrupted in several ways, among them stock-outs and delayed deliveries due to the lockdown, reduced demand for export products and difficulty in obtaining credit from financial institutions as well as reduced ability to meet their loan interest payments.

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